Strategic Initiatives Overview

Illovo’s future business continuity depends on its ability to innovate and to identify projects that will create diversified and sustainable revenue-streams for the longer-term, driven by the following key business messages:

Illovo is a sugar and downstream products company invested in the African growth story

Sugar is a cyclical business and we are in it for the long term

African annual sugar consumption growth continues to increase with demand expected to grow by 6 million tons by 2020

We will look to maximise our existing footprint advantage to access these markets

We will diversify our revenue by increasing our range of speciality packed sugar, develop origin brands for European markets, and continue to invest in business such as the new ethanol distillery in Tanzania;

We will drive out cost from our business through continuous improvement and ongoing investments in logistics cost reduction, such as the newly-commissioned South African warehouse

As quoted by Gavin Dalgleish, Illovo’s Managing Director in the 2014 Integrated Annual Report: “We are very optimistic about our future and are currently in a strong financial position to capitalise on numerous branding opportunities on a retail level in first-world markets and to strengthen our downstream product offering, benefitting from the success of our distillery commissioning in Tanzania. Ethanol is a valuable growth area for us, with plans in the pipeline to expand ethanol and furfural production in Zambia, South Africa and Eswatini. Our differentiated speciality sugars will be another important area of focus and growth. We have direct access into EU and UK markets, and there has also been a shift away from EU sales to regional markets where we believe we will realise better returns."

“Of course, the reforms in EU markets and the global production surplus will present short term challenges. However, we see abundant opportunity in the deficit regional markets in neighbouring countries. Our footprint gives us a comparative advantage in supplying these markets and the short-term outlook is responsible cost reduction and margin growth, with a long-term goal of driving revenue diversification. Through increased downstream production, we are confident that our strategic focus areas, as well as our continuous improvement programme, will bring about positive changes across the group, sustain our growth and ensure momentum going forward into 2015.”